An antibody will be used as a protein scaffold for presenting peptide antagonists of the IL-1 receptor. Display of the peptides within the third complementarity-determining region (CDR) of the heavy chain will be optimized by synthesis of expression libraries in which the CDR positions of the peptides and the flanking CDR residues are randomized. Functional antibody-displayed variants will be further optimized in vitro using directed evolution approaches consisting of random mutagenesis coupled with rapid screening methods for selection. The extent of mutagenesis will be regulated precisely using a methodology termed codon-based mutagenesis to synthesize focused libraries in which each variant differs from the parent molecule by no more than two amino acids. Quantitative and exhaustive screening of the focused libraries will be used to identify antibody-displayed peptides that are: (1) potent antagonists of the IL-1 receptor, (2) expected to display extended serum half- lives, and (3) are relatively non-immunogenic. The antibody- displayed IL-1 receptor antagonists are potential therapeutic agents for the treatment of rheumatoid arthritis, chronic inflammation, and autoimmune diseases. Antibody display of IL-1 receptor peptide antagonists will serve as a general model for the display of other bioactive peptides. PROPOSED COMMERCIAL APPLICATION A peptide antagonist to the IL-1 receptor, displayed and optimized within a protein scaffold consisting of the complementarity-determining region of an antibody, is expected to exhibit improved pharmacokinetics in vivo. Thus, it can be used as a long-acting and nonimmunogenic antagonist for the receptor of IL-1, a cytokine that plays a key role in rheumatoid arthritis, autoimmune conditions, and inflammation. Antibody display of the IL-1 antagonists serves as a general model for the display and optimization of other bioactive peptides.